Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Household Consumption by Income Level
Old 03-14-2013, 01:22 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,976
Household Consumption by Income Level

The phenomena is no surprise at all, but I don't remember the least time I've seen it quantified-illustrated so starkly. From an article on a related topic.

https://www.gmo.com/America/CMSAttac...zJ7aMFzw%3d%3d
Attached Images
File Type: jpg image.jpg (187.4 KB, 82 views)
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-14-2013, 01:38 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,282
It is somewhat interesting (and maybe/maybe-not surprising?) that the lowest 20% of households can still afford to spend, on average, ~38% on discretionary items. Since that is average, some are probably spending far less, and some far more than that on discretionary.

That's not exactly living hand-to-mouth, which is what I think the media portrays sometimes? That would be near 0% discretionary, no?

And this probably actually understates the delta between high/low incomes. At first glance, the % differences didn't seem that extreme to me, but clearly, the 'essentials' that make up ~42% of a high income person will typically include much nicer 'food and shelter' than the low income group. I think the low income group would look at most of those 'essentials' as 'discretionary'.

Yes, it's interesting. Thanks for posting.

-ERD50 (who should take a break from posting/reading and do his taxes!)
__________________

__________________
ERD50 is offline   Reply With Quote
Old 03-14-2013, 01:45 PM   #3
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,817
I'm a little confused by their definition of essential (vs discretionary)

from the article
Quote:
essentials such
as children’s education, medical expenses, and filial support, as well as to build a buffer against adverse life changes
By that definition, private school tuition and saving for a rainy day are considered essentials, not discretionary.
__________________
rodi is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 03:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.